How are Your Quantitative Risk Management Skills?
What is your background in using Excel and other tools to manipulate and process data sets for risk management? You may be interested in the next Risk and Insurance Management Society (RIMS) Risk Analysis Tools for Effective Risk Management. I attended the pilot in Miami, March 03-06, 2009.

The workshop is led by Rick Denning (himself a student of the famed Deming), President of Shelter Island Risk Services. The firm specializes in interpreting data and applying statistical methods, and then presenting the results — for example, for the purpose of understanding claims histories.

Creativity enters into data analysis. This is one lesson drawn from real work in this field. Other examples:

– There are no risk management industry data standards; they need to be negotiated;

– The quality of the data to be analyzed needs close attention; inconsistencies will ruin or skew statistical results;

– Beware of misleading or nonsensical graphic representation of data;

– Analysis is best presented as a collection of results (graphs, curves, etc.) in one view,which tell a consistent story, rather than a series of disconnected visuals.

Each data analysis project is a challenge to repair, if necessary,the data set; to determine the right variables to compare, and to present both statistically significant and meaningful results. Advanced registrants benefited from the opportunity to bring in their own data sets for analysis.

With respect to Enterprise Risk Management, the instructors covered the use of a risk tool, and pointed out the distinction between enterprise (strategic) risks, and others, such as insurable risks of lesser import.

The question that I went in with was: How can financial modeling support strategic planning and Enterprise Risk Management? The workshop helps build a foundation to ask: how did the assumptions used in risk modeling contribute to the economic crisis, and how can this can be avoided in the future?